Dagmar Grossmann

“I have always been blessed with the ability to see trends. I had a feeling that Eastern Europe would develop and the change between 2004 and 2013 has been huge.” (Photo by David McIntosh)

Tuesday, March 19, 2013 - 10:15am

Dagmar Grossmann’s first experience of what was then Czechoslovakia was anything but an auspicious prelude to her subsequent emergence as a private aviation pioneer in that country. It was 1967, the year before the so-called Prague Spring and revolution was in the air. The young Austrian girl was visiting relatives in the Czech capital when someone hurled a teargas grenade into the store she was in with her mother. In the mêlée they were separated and her parents spent three days fearing she’d been killed before they found her alone in a hospital.

Czechoslovakia—which split into the Czech and Slovak Republics in 1993—was to remain under Soviet domination until 1991. By then Grossmann was married to a pilot who had just started an executive charter operation in Vienna. She had entered the aviation business somewhat accidentally after joining Austrian Airlines as a flight attendant straight from college.

At the time she thought business aviation was second-class compared with the pre-no-frills world of European airlines. While raising two sons, she helped in the management of Grossmann Air Service, which during the heydays of the 1990s grew its fleet to 17 aircraft, making it one of Europe’s largest operators at the time.

But it was a stressful decade in which the woman who had once set her sights on being a surgeon struggled to come to terms with her role in the business. In 2001, she left the company and the marriage and formed her own firm. The next year, with Prague already in her sights as a place to start a new life, she met Karel Komárek, founder of Czech energy group KKCG and by 2004 she had convinced him to join her in launching Grossmann Jet Service, an aircraft charter and management group. It was the first private jet firm to secure a Czech air operators certificate and now there are 27 in the country.

In 2006 Grossmann sold a 49 percent stake in the business to KKCG but remained as chief executive. She has since founded the industry group Central Europe Private Aviation to help promote business aviation growth in the region.

We talked with Grossmann in London, where she was en route to an aircraft finance conference in Ireland.

You have been a pioneer in developing private aviation in Central and Eastern Europe. Was that a big risk for you?

It was a big risk but my alternative was to go back to Vienna where my [former] husband was in the same business under the same name. I could not reduce the risk through the force of my personality and my knowledge because the external factors were too strong—the language and the culture, for instance. I was a divorced foreigner in a business that no one [in the Czech Republic] knew.

Hiring people was the most difficult part because no one there understood the business and they didn’t believe I could get the clients and support their salaries. But I wanted to do something interesting and focus more on building up a business than on fighting with competition just to get crumbs from the cake. I was thankful to get a very wealthy group as my partner, even if this showed me that I had to work even harder.

I have always been blessed with the ability to see trends. I had a feeling that Eastern Europe would develop and the change between 2004 and 2013 has been huge. The speed of change there is very fast and speed is what I like.

What have been some of the hardest times you’ve had to deal with in business and what lessons did you learn from them?

It was definitely September 11 [2001]. It was the hardest time in 30 years in the industry. I was on holiday in Croatia on a boat [when the terrorist attacks happened]. At first I did not realize how bad the impact would be. Before that we had been having the best years, flying up to 120 hours per month with each of our jets. We made a lot of money and banks were financing up to 100 percent [of aircraft values]. But when September 11 happened, the phones didn’t ring for seven months. Operators were phoning each other to find that no one had any business. No one could pay the banks and you could never catch up [financially].

Even the most successful businesses were hit.

The main lesson I took from this was that I now never take risk entirely alone anymore. There were operators who didn’t have the funds to run their business because no one had ever imagined they wouldn’t have revenue for so long. It led to a discussion with my [then] husband when I told him that it was time to merge with someone who has another financial base. He was old school and thought it wasn’t necessary and all of these people failed.

Did this experience in 2001 prepare you to react to the subsequent financial crisis?

When I had the slightest feeling of a downturn I took immediate measures by decreasing costs and salaries. The Eastern European countries ignored the recession in the first year. They thought it was happening only in the West. They locked themselves away but later they became short on funds and then they completely stepped back from the market and sold airplanes and didn’t fly at all. It was amazing. Even some of the richest people in the East, including Russia, went back to doing their own gardening and a simple life.

How do you expect private aviation to evolve in the next 10 years?

In a few years from now, maybe by 2020, there will be no more [full-service] airlines. We will have only low-cost airlines and private jets. The [remaining] airlines will offer a no-fuss service, more like taking a bus. In business aviation it will all be heavy and midsized jets. I’ve always been against [the case for] very light jets. The profits from [operating] these are too small to cover the costs. They simply don’t work in private aviation—it’s the same with empty legs; they’re contradictory to the basic idea of the business.

Will business aviation do a better job of attracting new customers to try this mode of transportation?

I think we will, because lots of people are finding airlines expensive and very restrictive. The corporate travel market, in particular, is a strong opportunity. [In the future] any company above a certain size will have to have its own aircraft. It’s partly a question of image; a way to show that you are [financially] healthy. If I read that a company has a private jet then I see it as a company with a high value.

If you were advising a friend who wanted to start using private aircraft, what advice would you offer about how to choose an operator?

It’s the same as in any other business or even renting an apartment—you have to do background checks. I would choose [an operator] that has been in business for a long time and with a fleet that is not very big. With [operators] that have 10 more aircraft, it’s like a factory. I do background checks on the people [working for an operator doing contract work for Grossmann Jet Service]. I go to the pilot forums because this can tell you how a company treats its crew, but you have to discount some of [the pilot comments].

Of course, sometimes they write about us and even about me personally and that can be very interesting! I collect information about a company and make it clear what I want from them. But when business is tough, companies don’t always tell you the truth. Sometimes the salespeople sell something that the crew doesn’t deliver and there can be a big gap [between customer expectation and the service received]. If you serve cold soup on a flight then it can undermine six months of work to sell your company.

What business mistake do you most regret?

At the very beginning of my Prague venture I should not have been so involved in convincing people. I spent about 70 percent of my time telling [local] people what to do and I should have just let some things happen in their own way. I could have made better use of my energy for other things. I was a very different person at that time. I was an Austrian and my tone seemed very harsh [to Czech people]. You can’t act like that in the Czech Republic and I got my fingers burnt.

What is your proudest business accomplishment?

That my team and I achieved so much [in a new market] and that it finally worked. And also that so many people trust me, especially passengers. I am very proud that we helped to attract so many international clients and that we’ve created a Czech company competing on a world stage. We helped when the Hollywood crowd started coming to Prague. I am also very proud of getting our Czech AOC [air operators certificate] in just six months. The authorities let me take the test in Czech even though it wasn’t mandatory and I found a way to do it without being able to speak Czech [at the time]. I’ve enjoyed our success because we managed to make something happen contrary to the opinion of other people and a lot of people helped me to do this.

Your business requires a lot of people-management skills, to deal with demanding customers as well as with employees. What lessons have you learned from this?

That everything is possible and that I need to be more patient. Simply understanding what other people really mean can lead to more success, and this is definitely something you learn from doing business in a new place.

In your book Mythos-Pilot you wrote quite philosophically about the personality of pilots. Why are you so fascinated by pilots? Have you ever wanted to be one?

No, I never will be a pilot and I’ve never been interested in learning to fly. I was once persuaded to try a simulator and I couldn’t even hold the horizon [level on the instrument panel]. I need to have my feet on the ground and what interests me is moving people and things. I think pilots have [a need for] risk in their DNA. I’ve seen them risk everything, even their family life, to be a pilot. Boredom in the cockpit is a factor. They are always ready for an emergency but luckily it doesn’t happen often. They wait for something to happen and because of a mix of their personality, their high pay and boredom, they look for other things like crazy sports, building eight houses or being married five times. They always have to take more risk.

You’ve made the Czech Republic sound quite socially conservative and aviation is notorious for being male-dominated. Have you faced much discrimination as a woman in the industry?

Yes, I have been discriminated against a lot. In many cases, people simply didn’t believe that I had the knowledge to do what I do. They assumed I just worked in marketing. I’ve also had a lot of discrimination in my private life. I never speak about my private life and that alone leads to assumptions. [Male] pilots have often had a hard time working for me. As a woman all of this can make you very critical of men, more critical than I might be in another profession. Why don’t we find many women in the cockpit? Because it often doesn’t work well with having children. I have to admit that when I fly with airlines and I hear a female captain, I often assume she is a flight attendant. I know that’s wrong. It’s very bad, especially for me because I should celebrate it.

Résumé: Dagmar Grossmann

EDUCATION: University Pantheon Sorbonne (Paris); bachelor’s degree in economics at the University of Vienna; aviation MBA at Danube University Krems; master’s degrees in management and leadership and in economic psychology at Danube University Krems.

BOOKS: Coauthor, Mythos-Pilot-Von Abenteuren und coolen Typen. Author, The Significance of Changes Brought about by the Very Light Jet. Currently working on a book about ultra-high-net-worth individuals.